[Federal Register Volume 63, Number 117 (Thursday, June 18, 1998)]
[Notices]
[Pages 33408-33418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16216]


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DEPARTMENT OF JUSTICE

Antitrust Division
[Civil No. 96-2031]


Proposed Modified Final Judgment and Memorandum In Support of 
Modification

    Notice is hereby given that a Modified Final Judgment, Motion to 
Modify Final Judgment, Memorandum in Support of the Modification of the 
Final Judgment, Stipulation and Order, and Hold Separate Stipulation 
and Order have been filed with the United States District Court in the 
District of Columbia, in United States et al v. USA Waste Services, 
Inc., et al., Civil No. 96-2031.
    The existing Final Judgment stems from a 1996 acquisition of 
Sanifill, Inc., by USA Waste. The Final Judgment was entered to resolve 
competitive concerns that the Antitrust Division had about the impact 
of the acquisition in Houston, Texas. Pursuant to the Final Judgment, 
USA Waste divested Sanifill's small container commercial hauling assets 
and a USA Waste disposal site in Houston and sold 2,000,000 tons of air 
space rights for ten years at two USA Waste landfills in the Houston 
area. The assets were purchased by TransAmerican Waste Industries, Inc. 
On January 26, 1998, TransAmerican and USA Waste entered into an 
agreement whereby TransAmerican would be merged into USA Waste, and the 
Houston assets TransAmerican purchased from USA Waste would be owned by 
USA Waste.
    On May 5, 1998, the United States filed a proposed Modified Final 
Judgment to modify the Final Judgment in this case. The United States 
maintained that the proposed acquisition of TransAmerican's commercial 
hauling and disposal assets in the Houston area would violate the 
original Final Judgment. The proposed Modified Final Judgment requires 
USA Waste to divest the TransAmerican commercial small container and 
disposal assets in the Houston area and provide 2,000,000 tons of air 
space rights for ten years at two USA Waste landfills in the Houston 
area.
    The Hold Separate Stipulation and Order and the Stipulation and 
Order ensure that the provisions of the proposed Modified Final 
Judgment will be observed and that the assets to be divested will be 
held separate and maintained as a viable competitive entity until the 
divestiture takes place.
    Public comments on the proposed Modified Final Judgment should be 
directed to J. Robert Kramer, Chief, Litigation II Section, Antitrust 
Division, United States Department of Justice, 1401 H Street, NW, Suite 
3000, Washington, DC 20530 (telephone: 202/307-0924). Such comments and 
responses thereto will be filed with the Court.
Constance K. Robinson,
Director of Operations & Merger Enforcement.

Stipulation and Order

    To further the objectives of the Modified Final Judgment filed with 
the Court in this matter, it is stipulated by and between the United 
States of America (``United States''), the State of Texas (``Texas''), 
USA Waste Services, Inc. (``USA Waste''), and TransAmerican Waste 
Industries, Inc. (``TransAmerican''), by their respective attorneys, as 
follows:
    1. The Court has jurisdiction over the subject matter of this 
action and over the United States, Texas, USA Waste, and TransAmerican, 
and venue of this action is proper in the United States District Court 
for the District of Columbia.
    2. The parties stipulate that a Modified Final Judgment in the form 
hereto attached may be filed and entered by the Court, upon the motion 
of any party or upon the Court's own motion, at any time after 
completion of the procedures specified in the United States' 
Explanation of Procedures filed herewith without further notice to any 
party or other proceedings, provided that the United States and Texas 
have not withdrawn their consent, which they may do at any time before 
the entry of the proposed Modified Final Judgment by serving notice 
thereof on USA Waste and TransAmerican and by filing that notice with 
the Court.
    3. USA Waste and TransAmerican shall abide by and comply with the 
provisions of the proposed Modified Final Judgment pending entry of the

[[Page 33409]]

proposed Modified Final Judgment, or until expiration of time for all 
appeals of any court ruling declining entry of the proposed Modified 
Final Judgment, and shall, from the date of the signing of this 
Stipulation, comply with all the terms and provisions of the proposed 
Modified Final Judgment as though they were in full force and effect as 
an order of the Court.
    4. This Stipulation shall apply with equal force and effect to any 
amended proposed Modified Final Judgment agreed upon in writing by the 
parties and submitted to the Court.
    5. In the event (a) the United States and Texas have withdrawn 
their consent, as provided in paragraph 2 above, or (b) the proposed 
Modified Final Judgment is not entered pursuant to this Stipulation, 
the time has expired for all appeals of any Court ruling declining 
entry of the proposed Modified Final Judgment, and the Court has not 
otherwise ordered continued compliance with the terms and provisions of 
the proposed Modified Final Judgment, then the United States, Texas, 
USA Waste, and TransAmerican are released from all further obligations 
under this Stipulation, and the making of this Stipulation shall be 
without prejudice to any party in this or any other proceeding.
    6. USA Waste and TransAmerican represent that the divestiture 
ordered in the proposed Modified Final Judgment can and will be made, 
and that USA Waste and TransAmerican will later raise no claim of 
hardship or difficulty as grounds for asking the Court to modify any of 
the divestiture provisions contained therein.

    Dated: May 5, 1998.

For the United States:

Frederick H. Parmenter

Virginia Bar No.: 18184, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530, 
(202) 307-0620.

For the State of Texas

Dan Morales

Texas Attorney General.

Mark Tobey

Assistant Attorney General, Chief, Antitrust Section, Texas Bar No.: 
20082960.

Kim Van Winkle

Assistant Attorney General, Texas Bar No.: 24003104.

Office of the Attorney General of Texas, P.O. Box 12548, Austin, 
Texas 78711-2546, (512) 463-2185.

For USA Waste Services, Inc.

James R. Weiss

District of Columbia Bar No.: 379798, Preston, Gates, Ellis & 
Rouvelas Meeds, 1735 New York Avenue, N.W., Suite 500, Washington, 
D.C. 20006-5209, (202) 662-8425.

For TransAmerican Waste Industries, Inc.

J. David Green

Sr. Vice President & General Counsel, TransAmerican Waste 
Industries, Inc., 10554 Tanner Road, Houston, Texas 77041, (713) 
956-1212.

Order

    It is So Ordered, this 6th day of May, 1998.
Gladys Kessler,
United States District Judge.

Modified Final Judgment

    Whereas, the United States of America (``United States''), the 
State of Texas (``Texas''), and the Commonwealth of Pennsylvania 
(``Pennsylvania'') filed a Complaint in this action on August 30, 1996 
and a Final Judgment was entered on December 17, 1996.
    And whereas, the United States, Texas, USA Waste Services, Inc. 
(``USA Waste'') and TransAmerican Waste Industries, Inc. 
(``TransAmerican''), by their respective attorneys have consented to 
the entry of this Modified Final Judgment without trial or adjudication 
of any issue of fact or law herein, and without this Modified Final 
Judgment constituting any evidence against or an admission by the 
United States, Texas, USA Waste, or TransAmerican with respect to any 
issue of law or fact herein;
    And whereas, USA Waste and TransAmerican have agreed to be bound by 
the provisions of this Modified Final Judgment pending its approval by 
the Court.
    And whereas, prompt and certain divestiture of the Houston 
Divestiture Assets to assure that competition is not substantially 
lessened in the Houston Area is the essence of this agreement;
    And whereas, USA Waste and TransAmerican have represented to the 
United States and Texas that the divestiture required below can and 
will be made and that they will later raise no claims of hardship or 
difficulty as grounds for asking the Court to modify any of the 
divestiture provisions contained below;
    And whereas, the United States and Texas believe that entry of this 
Modified Final Judgment is in the Public Interest;
    Now, therefore, it is hereby Ordered, Adjudged, and Decreed that 
this Modified Final Judgment, shall modify the provisions in the Final 
Judgment relating to the Houston Divestiture Assets and the Houston 
area in the following ways:

I. Definitions

    As used in this Modified Final Judgment:
    A. Solid waste hauling means the collection and transportation to a 
disposal site of municipal solid waste (but not construction and 
demolition waste; medical waste; organic waste; special waste, such as 
contaminated soil; sludge; or recycled materials) from residential, 
commercial and industrial customers.
    B. Solid waste disposal means the disposal of Type 1 or 4 solid 
waste into disposal sites approved by the Texas Natural Resources 
Conservation Commission for Type 1 or Type 4 waste. Type 1 waste is 
municipal solid waste and Type 4 waste is dry waste such as 
construction and demolition waste.
    C. USA Waste means USA Waste Services, Inc., a Delaware corporation 
with its headquarters in Houston. Texas, and its successors and 
assigns, their subsidiaries, affiliates, directors, officers, managers, 
agents and employees.
    D. TransAmerican means TransAmerican Waste Industries, Inc., A 
Delaware corporation with its headquarters in Houston, Texas and its 
successors, and assigns, their subsidiaries, affiliates, directors, 
officers, managers, agents and employees.
    E. Houston Area means Harris County, Texas; Chambers County, Texas; 
Brazoria County, Texas; Fort Bend County, Texas; Montgomery County, 
Texas; Walker County, Texas; and Galveston County, Texas.
    F. Houston Hauling Assets means the front load commercial business 
of TransAmerican that provides solid waste hauling services in the 
Houston Area. These assets include all customer lists, contracts and 
accounts, including

[[Page 33410]]

all contracts for disposal of solid waste at disposal facilities, all 
trucks, containers, equipment, material, and supplies associated with 
these assets, and the garages, including all associated equipment, 
located at 10554 Tanner Road, Houston, Texas, 77041 and 999 Ashland, 
Channelview, Texas 77530.
    G. Sunray Assets means the operating, permitted Type 4 landfill 
(also known as the North County Landfill) and other related assets of 
TransAmerican with an office at 2015 Wyoming in League City, Texas. 
These assets include the current permit Number 1849 and permit 
application Number 1849A filed with the Texas Natural Resources 
Conservation Commission, all customers lists, contracts and accounts, 
including all equipment, material, and supplies associated with these 
assets.
    H. Airspace Assets means the right to dispose, over a ten-year 
period of up to a total of 2,000,000 tons of municipal solid waste in 
amounts of up to a total of 270,000 tons per year at the Hazelwood 
Landfill located at 4971 Tri-City Beach Road in Baytown, Texas and the 
Brazoria County Landfill located at 10310 FM 523 in Angleton, Texas.
    I. Houston Divestiture Assets refers to the Houston Hauling assets, 
Sunray Assets, and Airspace Assets.
    J. Small Container means a 1 to 10 cubic yard container.

II. Jurisdiction

    This Court has jurisdiction over the subject matter of this action 
and over the United States, Texas, USA Waste, and TransAmerican and 
venue of this action is proper in the United States District Court for 
the District of Columbia.

III. Applicability

    A. The provisions of this Modified Final Judgment apply to USA 
Waste and TransAmerican, their successors and assignees, their 
subsidiaries, affiliates, directors, officers, managers, agents, and 
employees, and all other persons in active concert or participation 
with any of them who shall have received actual notice of this Modified 
Final Judgment by personal service or otherwise.
    B. USA Waste and TransAmerican shall require, as a condition of the 
sale or other disposition of all or substantially all of the Houston 
Divestiture Assets, that the acquiring party or parties agree to be 
bound by the provisions of this Modified Final Judgment.

IV. Divestiture of Assets

    A. USA Waste and TransAmerican agree within 90 days from the filing 
of this Modified Final Judgment to divest the Houston Divestiture 
Assets, unless the United States, after consultation with Texas, 
consents that only some portion of the Houston Divestiture Assets need 
be divested. USA Waste and TransAmerican further agree to notify the 
United States and Texas in writing immediately when they have completed 
the divestitures.
    B. Unless the United States, after consultation with Texas, 
otherwise consents, divestiture under Section IV.A, or by the trustee 
appointed pursuant to Section V, shall be accomplished in such a way as 
to satisfy the United States, in its sole determination after 
consultation with Texas, that the Houston Hauling Assets can and will 
be operated by the purchaser as a viable, ongoing business engaged in 
solid waste hauling, and that the Sunray Assets can and will be 
operated by the purchases as a viable, ongoing business engaged in 
solid waste disposal in the Houston Area. Divestiture under Section 
IV.A or by the trustee, shall be made to a purchaser or purchasers for 
whom it is demonstrated to the satisfaction of the United States, after 
consultation with Texas, that (1) the purchase or purchases is or are 
for the purpose of competing effectively in solid waste hauling, dry 
waste disposal, or both, and (2) the purchaser or purchasers has or 
have the managerial, operational, and financial capability to compete 
effectively in solid waste hauling and/or disposal.
    C. In accomplishing the divestitures ordered by this Modified Final 
Judgment, USA Waste and TransAmerican promptly shall make known, by 
usual and customary means, the availability of the Houston Divestiture 
Assets described in this Modified Final Judgment. USA Waste and 
TransAmerican shall inform any person making an inquiry regarding a 
possible purchase that the sale is being made pursuant to this Modified 
Final Judgment and provide such person with a copy of this Modified 
Final Judgment. USA Waste and TransAmerican shall also offer to furnish 
to all bona fide prospective purchasers, subject to customary 
confidentiality assurances, all information regarding the Houston 
Divestiture Assets customarily provided in a due diligence process 
except such information subject to attorney-client or work-product 
privileges. USA Waste and TransAmerican shall make available such 
information to the United States and Texas at the same time such 
information is made available to any other person. In giving notice of 
the availability of the Houston Hauling Assets, defendants shall not 
exclude any persons bound by any non-compete obligations to Sanifill, 
Inc., or TransAmerican.
    D. USA Waste and TransAmerican shall not require of the purchaser 
or purchasers, as a condition of sale, that any current employee of the 
Houston Divestiture Assets be offered or guaranteed continued 
employment after the divestiture.
    E. USA Waste and TransAmerican shall take all reasonable steps to 
accomplish quickly the divestiture contemplated by this Modified Final 
Judgment.
    F. As part of the sale of the Airspace Assets, USA Waste and 
TransAmerican will include an agreement to accept waste from the 
purchaser or anyone designated by the purchaser to dispose of waste at 
the landfills. As agents of the purchaser, USA Waste and TransAmerican 
will operate the gate, scale house, and disposal area under terms and 
conditions no less favorable than those provided to USA Waste's and 
TransAmerican's vehicles or the vehicles of any municipality in the 
Houston Area, except as to price and credit terms.

V. Appointment of Trustee

    A. In the event that USA Waste and TransAmerican have not divested 
all of their assets required by Section IV.A by the time set forth in 
Section IV.A, the Court shall, on application of the United States, 
after consultation with Texas, appoint a trustee selected by the United 
States to effect the divestiture required by Section IV.A. After the 
appointment of a trustee becomes effective, only the trustee shall have 
the right to sell the assets required to be divested pursuant to 
Section IV.A. The trustee shall have the power and authority to 
accomplish the divestiture at the best price then obtainable upon a 
reasonable effort by the trustee, subject to the provisions of Section 
VI of this Final Judgment, and shall have such other powers as the 
Court shall deem appropriate. USA Waste and TransAmerican shall not 
object to a sale by the trustee on any grounds other than the trustee's 
malfeasance, or on the grounds that the sale is contrary to the express 
terms of this Modified Final Judgment. Any such objections by USA Waste 
or TransAmerican must be conveyed in writing to the United States, 
Texas, and the trustee within ten (10) days after the trustee has 
provided the notice required under Section VI.
    B. The trustee shall serve the cost and expense of USA Waste and 
TransAmerican, on such terms and conditions as the Court may prescribe, 
and shall account for all monies derived from the sale of the assets 
sold by the

[[Page 33411]]

trustee and all costs and expenses so incurred. After approval by the 
Court of the trustee's accounting, including fees for its services, all 
remaining money shall be paid to USA Waste and TransAmerican and the 
trust shall then be terminated. The compensation of such trustee shall 
be reasonable and based on a fee arrangement providing the trustee with 
an incentive based on the price and terms of the divestiture and the 
speed with which it is accomplished.
    C. USA Waste and TransAmerican shall use their best efforts to 
assist the trustee in accomplishing the required divestiture. The 
trustee and any consultants, accountants, attorneys, and other persons 
retained by the trustee shall have full and complete access to the 
personnel, books, records, and facilities of the Houston Divestiture 
Assets, and USA Waste and TransAmerican shall develop financial or 
other information relevant to such assets as the trustee may reasonably 
request, subject to reasonable protection for trade secret or other 
confidential research, development, or commercial information. USA 
Waste and TransAmerican shall take no action to interfere with or to 
impede the trustee's accomplishment of the divestiture.
    D. After its appointment, the trustee shall file monthly reports 
with the United States, Texas, USA Waste, TransAmerican, and the Court 
setting forth the trustee's efforts to accomplish the divestiture 
ordered under this Modified Final Judgment. If the trustee has not 
accomplished such divestiture within six months after its appointment, 
the trustee shall thereupon promptly file with the Court a report 
setting forth (1) the trustee's efforts to accomplish the required 
divestiture, (2) the reasons, in the trustee's judgment, why the 
required divestiture has not been accomplished, and (3) the trustee's 
recommendations. The trustee shall at the same time furnish such report 
to the United States, Texas, USA Waste, and TransAmerican, who shall 
each have the right to be heard and to make additional recommendations 
consistent with the purpose of the trust. The Court shall thereafter 
enter such orders as it shall deem appropriate in order to carry out 
the purpose of the trust, which may, if necessary, include extending 
the trust and the term of the trustee's appointment by a period 
requested by the United States, after consultation with Texas.
    E. USA Waste and TransAmerican shall give 30 days notice to the 
United States and Texas prior to acquiring any interest that is not 
otherwise reportable under the Hart-Scott-Rodino Act in any assets, 
capital stock, or voting securities, other than in the ordinary course 
of business, of any person that, at any time during the twelve months 
immediately preceding the acquisition, was engaged in the solid waste 
hauling industry in the Houston Area where the person had small 
container revenues in excess of $500,000 per year or total revenues in 
excess of $1 million per year. However, nothing herein shall preclude 
USA Waste or TransAmerican from acquiring less than five (5) percent of 
the stock of a publicly traded company.
    F. USA Waste and TransAmerican shall give 30 days notice to the 
United States and Texas prior to acquiring any interest that is not 
otherwise reportable under the Hart-Scott-Rodino Act in any assets, 
capital stock, or voting securities, other than in the ordinary course 
of business, of any person that, at any time during the twelve months 
immediately preceding the acquisition, was engaged in the municipal 
solid waste or dry waste disposal industry in the Houston Area, where 
the revenues of that person, when aggregated with the revenues of any 
person or persons acquired in the previous six months, exceed the 
revenue limits of paragraph E above. However, nothing herein shall 
preclude USA Waste or TransAmerican from acquiring less than five (5) 
percent of the stock of a publicly traded company.
    G. The purchaser or purchasers of the Houston Divestiture Assets, 
or any of them, shall not, without the prior written consent of the 
United States, after consultation with Texas, sell any of those assets 
to, or combine any of those assets with, those of USA Waste or 
TransAmerican during the life of this Modified Final Judgment. 
Furthermore, the purchaser or purchasers of the Houston Divestiture 
Assets, or any of them, shall notify the United States and Texas 45 
days in advance of any proposed sale of all or substantially all of the 
assets, or change in control over those assets, acquired pursuant to 
this Modified Final Judgment.

VI. Notification

    A. USA Waste, TransAmerican, or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States and Texas of any proposed divestiture required by 
Section IV or V of this Modified Final Judgment. If the trustee is 
responsible, it shall similarly notify USA Waste and TransAmerican. The 
notice shall set forth the details of the proposed transaction and list 
the name, address, and telephone number of each person not previously 
identified who offered or expressed an interest or desire to acquire 
any ownership interest in the Houston Divestiture Assets or any of 
them, together with full details of the same. Within fifteen (15) days 
after receipt of the notice, the United States and TransAmerican may 
request additional information concerning the proposed divestiture, the 
proposed purchaser and any other potential purchaser. USA Waste and 
TransAmerican or the trustee shall furnish the additional information 
within fifteen (15) days of the receipt of the request. Within thirty 
(30) days after receipt of the notice or within fifteen (15) days after 
receipt of the additional information, whichever is later, the United 
States, after consultation with Texas, shall notify in writing USA 
Waste and TransAmerican and the trustee, if there is one, if it objects 
to the proposed divestiture. If the United States fails to object 
within the period specified, or if the United States notifies in 
writing USA Waste and TransAmerican and the trustee, if there is one, 
that it does not object, then the divestiture may be consummated, 
subject only to USA Waste's and TransAmerican's limited right to object 
to the sale under Section V.A. Upon objection by the United States, 
after consultation with Texas, or by USA Waste and TransAmerican under 
Section V.A, the proposed divestiture shall not be accomplished unless 
approved by the Court.
    B. Thirty (30) days from the date when USA Waste and TransAmerican 
consummate the acquisition, but in no event later than May 30, 1998, 
and every thirty (30) days thereafter until the divestiture has been 
completed, USA Waste and TransAmerican shall deliver to the United 
States and Texas a written report as to the fact and manner of 
compliance with Section IV of this Modified Final Judgment. Each such 
report shall include, for each person who during the preceding thirty 
(30) days made an offer, expressed an interest or desire to acquire, 
entered into negotiations to acquire, or made an inquiry about 
acquiring any ownership interest in the Houston Divestiture Assets or 
any of them, the name, address, and telephone number of that person and 
a detailed description of each contact with that person during that 
period. USA Waste and TransAmerican shall maintain full records of all 
efforts made to divest the Divestiture Assets or any of them.

VII. Financing

    USA Waste and TransAmerican shall not finance all or any part of 
any purchase made pursuant to Section IV or V of this Modified Final 
Judgment without the prior written consent of the

[[Page 33412]]

United States, after consultation with Texas.

VIII. Preservation of Assets

    Until the divestitures required by the Modified Final Judgment have 
been accomplished:
    A. USA Waste and TransAmerican shall take all steps necessary to 
ensure that the Houston Hauling Assets will be maintained and operated 
in the ordinary course of business and consistent with past practices, 
and shall (1) maintain all insurance policies and all permits that are 
required for the operation of the assets, and (2) maintain books of 
account and records in the usual, regular, and ordinary manner and 
consistent with past practices.
    B. USA Waste and TransAmerican shall take all steps necessary to 
ensure that the Sunray Assets will be maintained and operated as an 
independent, ongoing, economically viable and active competitor in the 
provision of dry waste disposal services in the Houston Area, with 
management operations, books, records and competitively-sensitive 
sales, marketing and pricing information and decision-making kept 
separate and apart from, and not influenced by, that of TransAmerican's 
solid waste hauling and disposal business.
    C. USA Waste and TransAmerican shall use all reasonable efforts to 
maintain and increase sales of solid waste hauling and disposal 
services provided by the Houston Divestiture Assets, and they shall 
maintain at 1997 or previously approved levels, whichever is higher, 
promotional, advertising, sales, marketing and merchandising support 
for such services.
    D. USA Waste and TransAmerican shall take all steps necessary to 
ensure that the Houston Divestiture Assets are fully maintained in 
operable condition, and shall maintain and adhere to normal or 
previously approved repair, improvement and maintenance schedules for 
the Houston Divestiture Assets.
    E. USA Waste and TransAmerican shall not, except as part of a 
divestiture approved by the United States and Texas, remove, sell or 
transfer any Houston Divestiture Assets, other than solid waste hauling 
and disposal services provided in the ordinary course of business.
    F. USA Waste and TransAmerican shall take no action that would 
jeopardize the sale of the Houston Divestiture Assets.
    G. USA Waste and TransAmerican shall appoint a person with 
oversight responsibility for the Houston Divestiture Assets to insure 
compliance with this section of the Modified Final Judgment.

IX. Compliance Inspection

    For the purpose of determining or securing compliance with this 
Modified Final Judgment, and subject to any legally recognized 
privilege, from time to time.
    A. Duly authorized representatives of the United States and Texas 
including consultants and other persons retained by the plaintiffs, 
shall, upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division or the Attorney General of the State 
of Texas, respectively, and on reasonable notice to USA Waste and 
TransAmerican made to its principal offices, be permitted:
    1. Access during office hours to inspect and copy all books, 
ledgers, accounts, correspondence, memoranda, and other records and 
documents in the possession or under the control of USA Waste and 
TransAmerican, which have counsel present, relating to any matters 
contained in this Modified Final Judgment; and
    2. Subject to the reasonable convenience of USA Waste and 
TransAmerican and without restraint or interference from them, to 
interview their directors, officers, employees, and agents who may have 
counsel present, regarding any such matters.
    B. Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division or the Attorney General of the State 
of Texas, respectively, made to USA Waste and TransAmerican at their 
principal offices, USA Waste and TransAmerican shall submit such 
written reports, under oath if requested, with respect to any of the 
matters contained in this Modified Final Judgment as may be requested.
    C. No information nor any documents obtained by the means provided 
in this Section IX shall be divulged by any representative of the 
United States or the Office of the Attorney General of Texas to any 
person other than a duly authorized representative of the Executive 
Branch of the United States or of the Office of the Attorney General of 
Texas, except in the course of legal proceedings to which the United 
States or Texas is a party (including grand jury proceedings), or for 
the purpose of securing compliance with this Modified Final Judgment, 
or as otherwise required by law.
    D. If at the time information or documents are furnished by USA 
Waste and TransAmerican to the United States and Texas, USA Waste and 
TransAmerican represent and identify in writing the material in any 
such information or documents for which a claim of protection may be 
asserted under rule 26(c)(7) of the Federal Rules of Civil Procedure, 
and USA Waste and TransAmerican mark each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then the United States and Texas 
shall give ten (10) days notice to USA Waste and TransAmerican prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding) to which USA Waste or TransAmerican is not a party.

X. Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
any of the parties to this Modified Final Judgment to apply to this 
Court at any time for such further orders and directions as may be 
necessary or appropriate for the construction, implementation, or 
modification of any of the provisions of this Modified Final Judgment, 
for the enforcement of compliance herewith, and for the punishment of 
any violations hereof.

XI. Termination

    This Modification Final Judgment will expire on the tenth 
anniversary of the date of its entry.

XII. Public Interest

    Entry of this Modified Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------
----------------------------------------------------------------------
United States District Judge

Certificate of Service

    I hereby certify that copies of the Modified Final Judgment, Motion 
of the United States and Texas for Modification of the Final Judgment, 
United States' Explanation of Procedures, Hold Separate Stipulation and 
Order, Stipulation and Order, and Memorandum of the United States in 
Support of Modification of the Final Judgment have been served upon USA 
Waste Services, Inc., TransAmerican Waste Industries, Inc., and the 
Office of the Attorney General of Texas, by placing copies of the 
foregoing documents in the U.S. Mail, directed to each of the foregoing 
parties at the addresses given below, this 6th day of May, 1998.

USA Waste Services, Inc., c/o James R. Weiss, Esq., Preston, Gates, 
Ellis & Rouvelas Meeds, Suite 500, 1735 New York Avenue, NW., 
Washington, DC 20006-5209.
TransAmerican Waste Industries, Inc., J. David Green, Esq., Sr. Vice 
President

[[Page 33413]]

and General Counsel, 10554 Tanner Road, Houston, Texas 77041.
Mark Tobey, Assistant Attorney General, Chief, Antitrust Section, 
Office of the Attorney General of Texas, P.O. Box 12548, Austin, Texas 
78711-2546.
Frederick H. Parmenter,
U.S. Department of Justice, Antitrust Division, 1401 H Street, NW., 
Suite 3000, Washington, DC 20530.

Memorandum of the United States and Texas in Support of 
Modification of the Final Judgment

    The United States of America (``United States'') and the State of 
Texas (`'Texas'') submit this memorandum in support of their motion to 
modify the Final Judgment entered in the above-captioned matter. Filed 
with the memorandum is a Stipulation and Order, a Hold Separate 
Stipulation and Order, a Motion for Modification of the Final Judgment, 
an Explanation of Procedures, and a proposed Modified Final Judgment. 
In accordance with the provisions of the Stipulation and Order, USA 
Waste Services, Inc. (``USA Waste'') and TransAmerican Waste 
Industries, Inc. (``TransAmerican'') have agreed to be bound by the 
Modified Final Judgment following consummation of the merge and pending 
entry of the Modified Final Judgment. Similarly, in accordance with the 
Hold Separate Stipulation and Order, USA Waste and TransAmerican have 
agreed to hold the Houston Divestiture Assets separate and maintain 
them as competitively viable entities after the consummation of the 
merger and entry of the Modified Final Judgment. The proposed Modified 
Final Judgment only modifies the provisions of the Final Judgment 
relating to the Houston, Texas area. It does not have any impact, and 
is not meant to have any impact, on the provisions relating to 
Johnstown, Pennsylvania. The modifications are necessary to ensure that 
the original intent of the Final Judgment, to prevent competition from 
being lessened in the Houston refuse hauling and disposal markets, is 
preserved. Consequently, the modifications are in the public interest.

I. Background

    On August 30, 1996, the United States filed a civil antitrust 
Complaint in the above-styled action alleging that the proposed 
acquisition of the voting stock of Sanifill, Inc. (``Sanifill'') by USA 
Waste would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
Complaint alleged that the combination of these competitors would 
lessen competition substantially in the provision of small 
containerized waste hauling services and landfill disposal services in 
the Houston, area, among other geographic locations. The Houston area 
encompasses Harris County, Texas; Chambers County, Texas; Brazoria 
County, Texas; Fort Bend Count, Texas; Montgomery County, Texas; Walker 
County, Texas; and Galveston County, Texas, including the 
municipalities located, in whole or in part, in those counties 
(``Houston market'').
    When the Complaint was filed, the United States also filed a 
proposed settlement that was set forth in a proposed Final Judgment 
that permitted USA Waste to complete its acquisition of Sanifill, but 
required certain divestitures that would preserve competition in the 
Houston area. On December 17, 1996 after the comment period required by 
the Antitrust Penalties & Procedures Act (``APPA''), 15 U.S.C. 16, had 
passed, the Court entered the Final Judgment finding that it was in the 
public interest. On January 31, 1997, various waste hauling and 
disposal assets located in the Houston area where purchased by 
TransAmerican from USA Waste. Section V.G. of the Final Judgment 
required: (1) the purchaser of the divested hauling and disposal assets 
(e.g., Trans-American) to give the United States and Texas 45 days 
notice in advance of any sale of the assets, and (2) the purchaser 
would not sell the divested assets to be defendants (e.g., USA Waste) 
during the life of the decree.
    On February 26, 1998, TransAmerican notified the United States and 
Texas, as required by the Final Judgment, that TransAmerican had 
undertake to merge itself with USA Waste. The proposed merger of 
TransAmerican with USA Waste would permit USA Waste to acquire the 
TransAmerican Houston assets that TransAmerican was prohibited from 
selling to USA Waste by the Final Judgment. On April 9, 1998, the 
United States sent a letter to USA Waste and TransAmerican notifying 
them that based on its investigation and consultation with Texas, it 
could not give its consent to USA Waste's proposed purchase of the 
Houston assets. The United States and Texas were concerned that the 
acquisition would substantially lessen competition in the provision of 
small containerized waste hauling services and landfill disposal 
services in the Houston area. USA Waste and TransAmerican were 
substantially informed that the United States would undertake to 
enforce the Final Judgment if concerns about small containerized 
hauling and landfills in the Houston market were not resolved. The 
assets in the Houston area which were of concern to the United States 
that USA Waste would require through the merger were: (1) the 
TransAmerican frontload commercial assets (``Houston Hauling Assets``). 
(2) a TransAmerican Type 4 landfill and related assets (``the Sunray 
Assets''), and (3) the rights TransAmerican had acquire to dispose of 
2,000,000 tons of municipal solid waster (``MSW'') for ten years at a 
maximum rate of 270,000 tons a year at the USA Waste Hazlewood Landfill 
located at 4791 Tri-City Beach Road, Baytown, Texas 77520 and the USA 
Waste Brazoria County Landfill located at 10310 FM 523, Angleton, 
Texas. (``Airspace Assets''). Together the Houston Hauling Assets, 
Sunray Assets, and Airspace Assets are known as the Houston Divestiture 
Assets.
    To prevent competition from being substantially lessened for small 
containerized hauling and landfill disposal in the Houston area, and to 
permit USA Waste to complete TransAmerican's merger with USA Waste, the 
United States has filed with the Court a proposed settlement that 
supplements the Final Judgment entered by the Court on December 17, 
1996. It requires USA Waste to divest the Houston Divestiture Assets.
    The proposed Modified Final Judgment orders USA Waste to divest the 
Houston Divestiture Assets. In addition, USA Waste must complete the 
divestiture of the Houston Divestiture Assets within ninety (90) days 
after the date on which the proposed Modified Final Judgment was filed 
(i.e., May 6, 1998), in accordance with the procedures specified 
therein.
    The Stipulation and Order, Hold Separate Stipulation and Order, and 
proposed Modified Final Judgment require USA Waste to ensure that, 
until the divestitures mandated by the proposed Modified Final Judgment 
have been accomplished, the Houston Hauling Assets and the Sunray 
Assets will be maintained and operated as an independent, ongoing, 
economically viable and active competitor. USA Waste must preserve and 
maintain the assets to be divested as salable, ongoing concerns, with 
competitively sensitive business information and decision-making 
divorced from that of USA Waste. USA Waste will appoint a person or 
persons to monitor and ensure its compliance with these requirements of 
the proposed Modified Final Judgment.
    The United States, Texas, USA Waste, and TransAmerican have 
stipulated that the proposed Modified Final Judgment may be entered 
after compliance with the 60-day comment period provided for in the 
United States' Explanation of

[[Page 33414]]

Procedures. Entry of the proposed Modified Final Judgment would 
terminate any need for action regarding the proposed merger of 
TransAmerican with USA Waste, except that the Court would retain 
jurisdiction to construe, modify, or enforce the provisions of the 
proposed Modified Final Judgment and to punish violations thereof.

II. Description of the Events Giving Rise to the Proposed Modified 
Final Judgment

    USA Waste is a Delaware corporation with its principal office in 
Houston, Texas. USA Waste is engaged in providing nonhazardous solid 
waste hauling and/or disposal in 49 states and the District of 
Columbia. In 1997, USA Waste had total revenues of over $1.6 billion.
    TransAmerican is a Delaware corporation with its principal office 
in Houston, Texas. TransAmerican is engaged in providing nonhazardous 
solid waste hauling and/or disposal in five states. In 1996 
TransAmerican had total revenues of over $16 million.
    On January 26, 1998, USA Waste entered into an agreement and plan 
of merger whereby TransAmerican's stock would be acquired for 
approximately $125,470,000. This transaction is of concern to the 
United States and Texas because it would take place in the highly 
concentrated Houston small container hauling and landfill disposal 
industries and violate the December 17, 1996 Final Judgment entered in 
this action.

The Transaction's Effects in the Houston Market

A. The Solid Waste Hauling Industry
    The United States asserts that small containerized hauling services 
and landfill disposal services constitute lines of commerce, or 
relevant product markets, for antitrust purposes, and that the Houston 
area constitutes an appropriate section of the country, or relevant 
geographic market. The United States maintains that the effect of USA 
Waste's acquisition may be to lessen competition substantially in the 
provision of small containerized hauling services and landfill disposal 
services in the Houston market. As a result, when USA Waste undertook 
to acquire TransAmerican, the United States took the position that USA 
Waste could not obtain the small containerized hauling and landfill 
assets it divested to TransAmerican 18 months ago to resolve 
anticompetitive concerns that arose in August 1996, when USA Waste 
purchased Sanifill.
    Solid waste hauling involves the collection of paper, food, 
construction material and other solid waste from homes, businesses and 
industries, and the transporting of that waste to a landfill or other 
disposal site. These services may be provided by private haulers 
directly to residential, commercial and industrial customers, or 
indirectly through municipal contracts and franchises.
    Service to commercial customers accounts for a large percentage of 
total hauling revenues. Commercial customers include restaurants, large 
apartment complexes, retail and wholesale stores, office buildings, and 
industrial parks. These customers typically generate a substantially 
larger volume of waste than that generated by residential customers. 
Waste generated by commercial customers is generally placed in metal 
containers of one to ten cubic yards provided by their hauling company. 
One to ten cubic yard containers are called ``small containers.'' Small 
containers are collected primarily by front-end load vehicles that lift 
the containers over the front of the truck by means of a hydraulic 
hoist and empty them into the storage section of the vehicle, where the 
waste is compacted. Specially-rigged rear-end load vehicles can also be 
used to service some small container customers, but these trucks 
generally are not as efficient as front-end load vehicles and are 
limited in the size of containers they can safely handle. Front-end 
load vehicles can drive directly up to a container and hoist the 
container in a manner similar to a forklift hoisting a pallet; the 
containers do not need to be manually rolled into position by a truck 
crew as with a rear-end load vehicle. Service to commercial customers 
that use small containers is called ``small containerized hauling 
service.''
    Solid waste hauling firms also provide service to residential and 
industrial (or ``roll-off'') customers. Residential customers, 
typically households and small apartment complexes that generate small 
amounts of waste, use noncontainerized solid waste hauling service, 
normally placing their waste in plastic bags or trash cans at curbside. 
Rear-end load vehicles are generally used to collect waste from 
residential customers and from those commercial customers that generate 
relatively small quantities of solid waste, similar in amount and kind 
to those generated by residential customers. Generally, rear-end 
loaders use a two or three person crew to manually load the waste into 
the rear of the vehicle.
    Industrial or roll-off customers include factories and construction 
sites. These customers either generate non-compactible waste, such as 
concrete or building debris, or very large quantities of compactible 
waste. They deposit their waste into very large containers (usually 20 
to 40 cubic yards) that are loaded onto a roll-off truck and 
transported individually to the disposal site where they are emptied 
before being returned to the customer's premises. Customers, like 
shopping malls, use large, roll-off containers with compactors. This 
type of customer generally generates compactible trash, like cardboard, 
in very great quantities, it is more economical for this type of 
customer to use roll-off service with a compactor than to use a number 
of small containers picked up multiple times a week.
    There are no practical substitutes for small containerized hauling 
service. Small containerized hauling service customers will not 
generally switch to noncontainerized service because it is too 
impractical and costly for those customers to bag and carry their trash 
to the curb for hand pick-up. Small containerized hauling service 
customers also value the cleanliness and relative freedom from 
scavengers afforded by that service. Similarly, roll-off service is 
much too costly and takes up too much space for most small 
containerized hauling service customers. Only customers that generate 
the largest volumes of solid waste can economically consider roll-off 
service, and for customers that do generate large volumes of waste, 
roll-off service is usually the only viable option.
    Solid waste hauling services are generally provided in very 
localized areas. Route density (a large number of customers that are 
close together) is necessary for small containerized solid waste 
hauling firms to be profitable. In addition, it is not economically 
efficient for trash hauling equipment to travel long distances without 
collecting significant amounts of waste. Thus, it is not efficient for 
a hauler to serve major metropolitan areas from a distant base. 
Haulers, therefore, generally establish garages and related facilities 
within each major local area served.
    The United States asserts that USA Waste's acquisition of 
TransAmerican would substantially lessen competition for the provisions 
of small containerized hauling service in the Houston market. Actual 
and potential competition between USA Waste and TransAmerican for the 
provision of small containerized hauling service in the Houston market 
will be eliminated.
    USA Waste and TransAmerican are two of the largest providers of 
small

[[Page 33415]]

containerized hauling service in the Houston market. In the Houston 
market, USA Waste has 28 percent share and TransAmerican has a 7 
percent share. The acquisition would give USA Waste a 35 percent share 
of the market.
    Solid waste hauling is an industry highly susceptible to tacit or 
overt collusion among competing firms. Overt collusion has been 
documented in more than a dozen criminal and civil antitrust cases 
brought in the last decade and a half. Such collusion typically 
involves customer allocation and price fixing, and where it has 
occurred, has been shown to persist for many years.
    The elimination of one of a small number of significant 
competitors, such as would occur as a result of the proposed 
transaction in the alleged market, significantly increases the 
likelihood that consumers in these markets are likely to face higher 
prices or poorer quality service. A new entrant cannot constrain the 
prices of larger incumbents until it achieves minimum efficient scale 
and operating efficiencies comparable to the incumbent firms. In small 
containerized hauling service, achieving comparable operating 
efficiencies requires achieving route density comparable to existing 
firms, which typically takes a substantial period of time. A 
substantial barrier to entry is created by the use of long-term 
contracts coupled with selective pricing reductions to specific 
customers to deter new entrants into small containerized hauling 
service and to hinder them in winning enough customers to build 
efficient routes. Further, even if a new entrant endures and grows to a 
point near minimum efficient scale, the entrant will often be purchased 
by an incumbent firm and will be removed as a competitive threat.
B. Landfill Disposal Services
    Most commercial solid waste is taken by haulers to landfills for 
disposal. Access to a suitable municipal solid waste (``MSW'') landfill 
at a competitive price is essential to a hauling company performing 
commercial containerized hauling service because disposal costs account 
for approximately 30-50 percent of the revenues received for this 
service. Suitable MSW landfills are difficult and time consuming to 
obtain because of the scarcity of appropriate land, high capital cost, 
local resident opposition, and government regulation. Several years are 
required to process an application, with no guarantee of success.
    In Texas, dry waste can be taken to what is referred to as a dry 
waste (Type 4) landfill. Access to a suitable landfill at a competitive 
price is essential to a hauling company collecting dry waste because 
disposal costs can account for over 60% of the revenues for this 
service. Dry waste landfills are difficult and time consuming to obtain 
because to permit and build a Type 4 landfill in Texas, one must go 
through a process similar to that for permitting a Type 1 landfill. 
Several years are required to process an application, with no guarantee 
of success.
    TransAmerican's merger with USA Waste will substantially lessen 
competition for landfill service in the Houston market. Actual and 
potential competition between USA Waste and TransAmerican for the 
provision of MSW and dry waste landfill service in the Houston market 
will be eliminated. USA Waste is the largest owner of dry waste 
landfill services in the Houston market. In the Houston area, there are 
18 Type 4 landfills in the Houston area. USA Waste has eleven dry waste 
landfills (four operating) and TransAmerican has one. Concerning Type 1 
MSW landfills, there are nine in the Houston area that are owned by 
three firms. Through the Final Judgment, TransAmerican obtained access 
to the USA Waste Type 1 landfills for a period of ten years thereby 
assuring it disposal access for the MSW it hauls.
    As a result of the acquisition, the concentration of dry waste 
landfill services in the Houston market will be substantially 
increased, which is likely to result in price increases. Furthermore, a 
small containerized hauling competitor with guaranteed access to Type 1 
landfills will be removed from the Houston area. In the Houston market, 
there are no alternative types of facilities available for the disposal 
of either MSW waste or dry waste. Although dry waste can be taken to 
either a MSW or a dry waste landfill, prices at the MSW landfill are 
significantly higher than at the dry waste landfill, so that MSW 
landfills are not normally used for dry waste. Accordingly, haulers are 
not likely to switch to another disposal service despite an increased 
concentration in the ownership of MSW or dry landfills and a likely 
price increase resulting from the merger.
C. Harm to Competition as a Consequence of the Acquisition
    The United States asserts that the transaction would have the 
following effects, among others: competition for the provision of small 
containerized hauling service and landfill disposal service in the 
Houston market will be substantially lessened; actual and potential 
competition between USA Waste and TransAmerican in the provision of 
small containerized hauling service and landfill disposal service in 
the Houston market will be eliminated; and prices for small 
contianerized hauling service and landfill disposal service in the 
Houston market are likely to increase above competitive levels.

III. Explanation of the Proposed Modified Final Judgment

    The provisions of the proposed Modified Final Judgment are designed 
to eliminate the anticompetitive effects of the acquisition in small 
containerized hauling services in the Houston market by ensuring that 
the intent of the provisions of the Final Judgment relating to the 
Houston market and the Houston Divestiture Assets entered by the Court 
on December 17, 1996 are enforced and a new, independent and 
economically viable competitor is established in the Houston market. 
The proposed Modified Final Judgment requires USA Waste and 
TransAmerican, within 90 days of May 6, 1998, to divest, as viable 
ongoing business, the Houston Hauling Assets, Sunray Assets and the 
Airspace Assets. The divestitures would include the small containerized 
hauling service assets, landfill disposal assets, and such other assets 
as may be necessary to ensure the viability of the small container and 
landfill businesses. If USA Waste and TransAmerican cannot accomplish 
these divestitures within the above-described period, the proposed 
Modified Final Judgment provides that, upon application (after 
consultation with Texas) by the United States, the Court will appoint a 
trustee to effect divestiture.
    The proposed Modified Final Judgment provides that these assets 
must be divested in such a way as to satisfy the United States (after 
consultation with Texas) that the operations can and will be operated 
by the purchaser or purchasers as viable, ongoing businesses that can 
compete effectively in the relevant market. USA Waste and TransAmerican 
must take all reasonable steps necessary to accomplish the 
divestitures, shall cooperate with bona fide prospective purchasers 
and, if one is appointed, with the trustee.
    If a trustee is appointed, the proposed Modified Final Judgment 
provides that USA Waste and TransAmerican will pay all costs and 
expenses of the trustee. The trustee's commission will be structured so 
as to provide an incentive for the trustee based on the price obtained 
and the speed with which divestiture is accomplished. After his or her 
appointment becomes effective, the

[[Page 33416]]

trustee will file monthly reports with the United States, Texas, USA 
Waste, TransAmerican and the Court, setting forth the trustee's efforts 
to accomplish divestiture. At the end of six months, if the divestiture 
has not been accomplished, the trustee and the United States, Texas, 
USA Waste, and TransAmerican will make recommendations to the Court 
which shall enter such orders as appropriate in order to carry out the 
purpose of the trust, including extending the trust or the term of the 
trustee's appointment.
    In addition, the proposed Modified Final Judgment intends to 
eliminate the anticompetitive effects of the acquisition in the Houston 
Area market for MSW disposal services by requiring USA Waste and 
TransAmerican to sell the rights to dispose of 2 million tons of MSW 
waste over ten years at USA Waste's only two MSW landfills in the area. 
The proposed Modified Final Judgment limits the amount disposed of in 
any one year to 270,000 tons and requires that USA Waste will provide 
the necessary services to dispose of the waste to the purchaser or any 
agents designated by the purchaser in a nondiscriminatory manner. The 
availability of this landfill capacity helps to ensure the success of 
any entity purchasing the Houston Hauling Assets in competing with 
other haulers in the Houston market.
    Pursuant to its terms, the proposed Modified Final Judgment 
mandates that USA Waste and TransAmerican divest TransAmerican's sole 
dry waste (Type 4) landfill (the North County Landfill) in the Houston 
area market. The divestiture of the North County Landfill will help 
moderate any possible anticompetitive effect related to the merger and 
its impact on dry waste landfills in the Houston area market.
    Finally, the requirement of the proposed Modified Final Judgment 
that USA Waste and TransAmerican provide 30 days written notice of any 
proposed purchase of significant waste hauling or disposal companies in 
the Houston market ensures that the U.S. Department of Justice and the 
State of Texas General's Office will be able to review, consider and 
oppose if necessary any future consolidation in the market for a period 
of ten years.

IV. Modification is in the Public Interest

    Uncontested motions to modify the Final Judgment are granted if the 
proposed modification is within the reaches of the public interest. 
See, e.g., United States v. Western Electric Co., 993 F.2d 1572, 1576 
(D.D.C. 1993) (Citing United States v. Western Electric Co., 900 F.2d 
283, 307 (D.D.C. 1990) (hereinafter Triennial Review)). In the context 
of an uncontested motion to modify an existing consent decree, the 
``public interest'' standard ``directs the district court to approve an 
uncontested modification so long as the resulting array of rights and 
obligations is within the zone of settlements consonant with the public 
interest today.'' United States v Western Electric 1993 F.2d at 1576 
(quoting Triennial Review, 900 F.2d at 307) (emphasis in original). 
Thus, ``it is not up to the court to reject an agreed-on change simply 
because the proposal diverged from its view of the public interest. 
Rather, the court [is] bound to accept any modification that the 
Department (with the consent of third parties, we repeat) reasonably 
regarded as advancing the public interest.'' United States v. Western 
Electric Co., 993 F.2d at 1576. See also United States v. Microsoft 
Corp., 56 F.3d 1448, 1461-62 (D.C. Cir. 1995); United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9<SUP>th</SUP> Cir.), cert. denied, 454 U.S. 
1083 (1981); United States v. BNS. Inc., 858 F.2d 456, 462 
(9<SUP>th</SUP> Cir. 1988). Precedent requires that the balancing of 
competing social and political interests affected by a proposed 
antitrust consent decree must be left, in the first instance, to the 
discretion of the Attorney General. The court's role in protecting the 
public interest is one of insuring that the government has not breached 
its duty to the public in consenting to the decree. The court is 
required to determine not whether a particular decree is one that will 
best serve society, but whether the settlement is `within the reaches 
of the public interest.' More elaborate requirements might undermine 
the effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added); See BNS, 858 F.2d at 463; 
United States v. National Broadcasting Co., 449 F. Supp. 1127, 1143 
(C.D. Cal. 1978) See also Microsoft, 56 F.3d at 1461.

V. Conclusion

    For all of the foregoing reasons, the proposed modification is in 
the public interest, and the motion to enter the Modified Final 
Judgment should be granted. Respectfully submitted.

    Dated: May 5, 1998.

For the United States

Frederick H. Parmenter
Virginia Bar No.: 18184, Attorney, U.S. Department of Justice, 
Antitrust Division, 1401 H Street, N.W., Washington, D.C. 20530, (202) 
307-0620.

For the States of Texas

Dan Morales,
Texas Attorney General.
Mark Tobey,
Assistant Attorney General, Chief, Antitrust Section, Texas Bar No.: 
20082960.
Kim Van Winkle,
Assistant Attorney General, Texas Bar No.: 24003104.
Office of the Attorney General of Texas, P.O. Box 12548, Austin, Texas 
78711-2546, (512) 463-2185.

Motion of the United States and Texas for Modification of The Final 
Judgment

    The United States of America (``United States'') and the State of 
Texas (``Texas'') move this Court to modify the Final Judgment in the 
above-captioned matter as to the provisions relating to the Houston 
Divestiture Assets and the Houston area. This motion is based on the 
following grounds:

I. Definitions

    1. USA Waste means USA Waste Services, Inc., a Delaware corporation 
with its headquarters in Houston, Texas, and its successors and 
assigns, their subsidiaries, affiliates directors, officers, managers, 
agents and employees.
    2. Houston Area means Harris County, Texas; Chambers County, Texas; 
Brazoria County, Texas; Fort Bend County, Texas; Montgomery County, 
Texas; Walker County, Texas; and Galveston County, Texas.
    3. Houston Hauling Assets means the frontload commercial business 
of TransAmerican that provides solid waste hauling services in the 
Houston Area. These assets include all customer lists, contracts and 
accounts, including all contracts for disposal of solid waste at 
disposal facilities, all trucks, containers, equipment, material, and 
supplies associated with these assets, and the garages, including all 
associated equipment, located at 10554 Tanner Road, Houston, Texas 
77041 and 999 Ashland, Channelview, Texas 77530.
    4. Sunray Assets means the operating, permitted Type 4 landfill 
(also known as the North County Landfill) and other related assets of 
TransAmerican with an office at 2015 Wyoming in League City, Texas. 
These assets include the current permit Number 1849 and permit 
application Number 1849A filed with the Texas Natural Resource 
Conservation Commission, all customer lists, contracts and accounts, 
including

[[Page 33417]]

all equipment, material, and supplies associated with these assets.
    5. Airspace Assets means the right to dispose, over a ten-year 
period of up to a total of 2,000,000 tons of municipal solid waste in 
amounts of up to a total of 270,000 tons per year at the Hazlewood 
Landfill located at 4971 Tri-City Beach Road in Baytown, Texas and the 
Brazoria County Landfill located at 10310 FM 523 in Angleton, Texas.
    6. Houston Divestiture Assets means the Houston Hauling Assets, 
Sunray Assets, and Airspace Assets.

II. Background and Objectives

    1. On August 30, 1996, the United Texas, and Pennsylvania filed a 
complaint in the above-cationed case alleging that USA Waste's 
acquisition of Sanifill, Inc. (``Sanifill'') violated Section 7 of the 
Clayton Act, 15 U.S.C. 18. The complaint alleged that the combination 
of USA Waste and Sanifill would substantially lessen competition in 
providing hauling and disposal services in the Houston Area and 
Johnstown, Pennsylvania.
    2. On December 17, 1996, the Court entered a Final Judgment which 
directed the defendants to divest the Houston Divestiture Assets and 
undertake certain measure in Johnstown to alleviate the competitive 
harm of the acquisition.
    3. The Houston Divestiture Assets were purchased by TransAmerican 
on January 31, 1997.
    4. On January 26, 1998, USA Waste entered into an agreement with 
TransAmerican pursuant to which USA Waste proposed to merge 
TransAmerican with USA Waste. The value of the proposed transaction is 
approximately $125,470.000.
    5. On February 26, 1998, TransAmerican notified the United States 
and Texas as required by the Final Judgment that TransAmerican has 
undertaken to merge itself with USA Waste. Section V.G. of the Final 
Judgment requires the purchaser of the Houston Divestiture Assets 
(e.g., TransAmerican) to give the United States and Texas 45 days 
notice in advance of any sale of the Houston Divestiture assets and 
that the purchaser shall not sell the Houston Divestiture Assets to the 
defendants (e.g., USA Waste) during the life of the decree.
    6. On April 9, 1998, the United States sent a letter to USA Waste 
and TransAmerican notifying them that based on its investigation 
consultations with Texas, it could not give its consent to USA Waste's 
proposed purchase of the Houston assets.
    7. USA Waste and TransAmerican have agreed to the prompt and 
certain divestiture of the Houston Divestiture Assets as a viable 
business operation to a third party or parties to assure that 
competition is not substantially lessened in the Houston Area.
    8. For the purpose of accomplishing the divestiture of the Houston 
Divestiture Assets, USA Waste and TransAmerican authorize the United 
and Texas to state that they concur in this motion.
    9. The United States does not believe that that proposed Modified 
Final Judgment is subject to the Antitrust Procedures and Penalties 
Act, 15 U.S.C. 16. However, the United States intends to follow the 
comment procedures outlined in the attached Explanation of Procedures. 
After completion of the procedures, the United States will file another 
motion requesting that the Court enter the attached Modified Final 
Judgment.

        Respectfully submitted.

    Dated: May 5th, 1998

For the United States:

Frederick H. Parmenter,
Virginia Bar No.: 18184, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530, 
(202) 307-0620.

For The State of Texas

Dan Morales,
Texas Attorney General.
Mark Tobey,
Assistant Attorney General, Chief, Antitrust Section, Texas Bar No.: 
20082960.
Kim Van Winkle,
Assistant Attorney General, Texas Bar No.: 24003104.
Office of the Attorney General of Texas, P.O. Box 12548, Austin, Texas 
78711-2546, (512) 463-2185.

Hold Separate Stipulation and Order

    It is hereby stipulated and agreed by and between the United States 
of America, the State of Texas, USA Waste Services, Inc., and 
TransAmerican Waste Industries, Inc., subject to approval and entry by 
the Court, that:

I. Definitions

    As used in this Hold Separate Stipulation and Order:
    A. Solid waste hauling means the collection and transportation to a 
disposal site of municipal solid waste (but not construction and 
demolition waste; medical waste; organic waste; special waste, such as 
contaminated soil; sludge; or recycled materials) from residential, 
commercial and industrial customers.
    B. USA Waste means USA Waste Services, Inc., a Delaware corporation 
with its headquarters in Houston, Texas, and its successors and 
assigns, their subsidiaries, affiliates, directors, officers, managers, 
agents and employees.
    C. TransAmerican means TransAmerican Waste Industries, Inc., a 
Delaware corporation with its headquarters in Houston, Texas and its 
successors and assigns, their subsidiaries, affiliates, directors, 
officers, managers, agents and employees.
    F. Houston Area means Harris County, Texas; Chambers County, Texas; 
Brazoria County, Texas; Fort Bend County, Texas; Montgomery County, 
Texas; Walker County, Texas; and Galveston County, Texas.
    G. Houston Hauling Assets means the frontload commercial business 
of TransAmerican that provides solid waste hauling services in the 
Houston Area. These assets include all customer lists, contracts and 
accounts, including all contracts for disposal of solid waste at 
disposal facilities, all trucks, and containers, equipment, material, 
and supplies associated with these assets, and the garages, including 
all associated equipment, located at 10554 Tanner Road, Houston, Texas 
77041 and 999 Ashland, Channelview, Texas 77530.
    H. Sunray Assets means the operating, permitted Type 4 landfill 
(also known as the North County Landfill) and other related assets of 
USA Waste with an office at 2015 Wyoming in League City, Texas. These 
assets include the current permit Number 1849 and permit application 
Number 1849A filed with the Texas Natural Resource Conservation 
Commission, all customer lists, contracts and accounts, including all 
equipment, material, and supplies associated with these assets.
    I. Airspace Assets means the right to dispose, over a ten-year 
period of up to a total of 2,000,000 tons of municipal solid waste in 
amounts of up to a total of 270,000 tons per year at the Hazlewood 
Landfill located at 4971 Tri-City Beach Road in Baytown, Texas and the 
Brazoria County Landfill located at 10310 FM 523 in Angleton, Texas.
    J. Houston Divestiture Assets means to the Houston Hauling Assets, 
Sunray Assets, and Airspace Assets.

II. Objectives

    The Modified Final Judgment filed in this case is meant to ensure 
USA Waste's prompt divestiture of the Houston Divestiture Assets for 
the purpose of maintaining a viable competitor in the waste disposal 
and hauling business in the Houston area to remedy the effects that the 
United States and Texas allege would otherwise result from USA Waste's 
proposed acquisition of TransAmerican. This Hold Separate

[[Page 33418]]

Stipulation and Order ensures, prior to such divestiture, that the 
Houston Hauling Assets and the Sunray Assets which are being divested 
be maintained as independent, economically viable, ongoing business 
concerns, and that competition is maintained during the pendency of the 
divestiture.

III. Hold Separate Provisions

    Until the divestiture required by the Modified Final Judgment has 
been accomplished:
    A. USA Waste shall preserve, maintain, and operate the Houston 
Hauling Assets and the Sunray Assets as independent competitors with 
management, sales, and operations held entirely separate, distinct and 
apart from those of USA Waste. USA Waste shall not coordinate the 
marketing or sale of its waste disposal and hauling business with the 
waste disposal and hauling business at the Houston Hauling Assets and 
the Sunray Assets. Within thirty (30) days of the entering of this 
Order, USA Waste will inform the United States and Texas of the steps 
taken to comply with this provision.
    B. USA Waste shall take all steps necessary to ensure that the 
Houston Hauling Assets and the Sunray Assets will be maintained and 
operated as independent, ongoing, economically viable and active 
competitors in the waste disposal and hauling business in the Houston 
area; and that the management of the Houston Hauling Assets and the 
Sunray Assets will not be influenced by USA Waste, and the books, 
records, competitively sensitive sales, marketing and pricing 
information, and decision-making associated with the Houston Hauling 
Assets and the Sunray Assets will be kept separate and apart from the 
operations of USA Waste. USA Waste's influence over the Houston Hauling 
Assets and the Sunray Assets shall be limited to that necessary to 
carry out USA Waste's obligations under this Order and the Modified 
Final Judgment.
    C. USA Waste shall use all reasonable efforts to maintain and 
increase waste disposal and hauling sales at the Houston Hauling Assets 
and the Sunray Assets, and shall maintain at 1997 or previously 
approved levels, whichever are higher, promotional, advertising, sales, 
technical assistance, marketing and merchandising support for the 
disposal and hauling of waste associated with the Houston Hauling 
Assets and the Sunray Assets.
    D. USA Waste shall provide sufficient working capital to maintain 
the Houston Hauling Assets and the Sunray Assets as economically 
viable, ongoing businesses.
    E. USA Waste shall take all steps necessary to ensure that the 
Sunray Assets are fully maintained in operable condition at no lower 
than its current rated capacity, and shall maintain and adhere to 
normal repair and maintenance schedules for the Houston Hauling Assets 
and the Sunray Assets.
    F. USA Waste shall not, except as part of a divestiture approved by 
the United States and Texas, remove, sell, lease, assign, transfer, 
pledge or otherwise dispose of any assets of the Houston Hauling Assets 
and the Sunray Assets, including intangible assets that relate to the 
permits described in Section I of the Modified Final Judgment.
    G. USA Waste shall maintain, in accordance with sound accounting 
principles, separate, accurate and complete financial ledgers, books 
and records that report on a periodic basis, such as the last business 
day of every month, consistent with past practices, the assets, 
liabilities, expenses, revenues and income of the Houston Hauling 
Assets and the Sunray Assets.
    H. Except in the ordinary course of business or as is otherwise 
consistent with this Hold Separate Agreement, USA Waste and 
TransAmerican shall not hire and USA Waste and TransAmerican shall not 
transfer or terminate, or alter any current employment or salary 
agreements for any USA Waste or TransAmerican employees who (I) on the 
date of the signing of this Agreement, work at the Houston Hauling 
Assets or the Sunray Assets or (ii) are members of management 
referenced in Section III(I) of this Order.
    I. Until such time as the Houston Hauling Assets and the Sunray 
Assets are divested, the Assets to be Divested shall be managed by Ted 
Meyer of TransAmerican. Ted Meyer shall have complete managerial 
responsibility for the Houston Hauling Assets and the Sunray Assets, 
subject to the provisions of this Order and the Modified Final 
Judgment. In the event that Ted Meyer is unable to perform his duties, 
USA Waste shall appoint, subject to the United States' and Texas' 
approval, a replacement within ten (10) working days. Should USA Waste 
fail to appoint a replacement acceptable to the United States and Texas 
within ten (10) working days, the United States and Texas shall appoint 
a replacement.
    J. USA Waste shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Modified Final 
Judgment to complete the divestiture pursuant to the Modified Final 
Judgment to a suitable purchaser.
    K. this Hold Separate Stipulation and Order shall remain in effect 
until consummation of the divestiture contemplated by the Modified 
Final Judgment or until further Order of the Court.

    Dated: May 5, 1998.

For the United States:

Frederick H. Parmenter,
Virginia Bar No.: 18184, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530, 
(202) 307-0620.

For the State of Texas

Dan Morales,
Texas Attorney General.
Mark Tobey,
Assistant Attorney General, Chief, Antitrust Section, Texas Bar No.: 
20082960.

For USA Waste Services, Inc.

James R. Weiss,
District of Columbia Bar No.: 379798, Preston, Gates, Ellis & Rouvelas 
Meeds, 1735 New York Avenue, N.W., Suite 500, Washington, D.C. 20006-
5209, (202) 662-8425.

For TransAmerican Waste Industries, Inc.

J. David Green,
Sr. Vice President & General Counsel, TransAmerican Waste Industries, 
Inc., 10554 Tanner Road, Houston, Texas 77041, (713) 956-1212.
Kim Van Winkle,
Assistant Attorney General, Texas Bar No.: 24003104, Office of the 
Attorney General of Texas, P.O. Box 12548, Austin, Texas 78711-2546, 
(512) 463-2185.

Order

    It is so ordered, this 6th day of May, 1998.
Gladys Kessler,
United States District Judge.
[FR Doc. 98-16216 Filed 6-17-98; 8:45 am]
BILLING CODE 4410-11-M